Audit: TSA Spent Lavishly on Awards Ceremony

WASHINGTON – The government agency in charge of airport security spent nearly a half-million dollars on an awards ceremony at a lavish hotel, including $81,000 for plaques and $500 for cheese displays, according to an internal report obtained by The Associated Press.

Awards were presented to 543 Transportation Security Administration (search) employees and 30 organizations, including a "lifetime achievement award" for one worker with the 2-year-old agency. Almost $200,000 was spent on travel and lodging for attendees.

The investigation by the Homeland Security Department's (search) inspector general, Clark Kent Ervin, also found the TSA gave its senior executives bonuses averaging $16,000, higher than at any other federal government agency, and failed to provide adequate justification in more than a third of the 88 cases examined.

The report said lower-level employees were shortchanged, with a far lower percentage receiving bonuses.

TSA spokeswoman Amy von Walter said the agency believes the bonuses and party were justified "given the hours and productivity of the work force during this critical period."

This year, said von Walter, the TSA will conduct awards ceremonies at individual airports, as well as a much smaller and less expensive event at its headquarters in November.

Congressional skeptics have criticized the TSA's hiring and spending practices during its short existence. Republicans say the agency has grown far larger than they envisioned when it was created following the Sept. 11, 2001, attacks.

Ervin also is investigating why the agency's private recruiters worked out of lush resort hotels with golf courses, pools and spas.

Sen. Byron Dorgan, D-N.D., said that he had not seen the full report but that it indicated "a colossal waste of money."

"There's something terribly wrong with that agency," Dorgan said. "Of all the agencies, that's the one that's supposed to be working full-time against terrorist attacks."

The awards banquet, which cost $461,745, was held at the Grand Hyatt, which bills itself as "one of the most magnificent" hotels in the nation's capital. According to the report, the agency chose that site because it was the only hotel available on Nov. 19, 2003, the agency's second anniversary. It also was one of the few places that could accommodate about 600 honorees and as many guests.

While the inspector general noted the agency sought competitive bids for the party planner and chose the company with the lowest estimate, it found the "costs of the ceremony and reception were higher than necessary."

The event planning company, MarCom Group Inc. (search) of Fairfax, Va., was paid $85,552 for its work and given an additional $81,767 for plaques, $5,196 for official photographs, $1,486 for three balloon arches and $1,509 for signs.

The reception included finger food, coffee and cake that averaged $33 per person. Seven cakes cost a total of $1,850; three cheese displays, $1,500.

In a written response, the TSA said the costs "were neither extraordinary nor incurred without careful consideration of the amount, the reasonableness of the cost, and value the activities would have to the employees."

The inspector general also expressed concern that the TSA was more generous than most other federal agencies in awarding bonuses to executives. Federal agencies on average gave cash awards to 49 percent of their executives in 2002, while 76 percent of TSA executives received them in 2003.

The inspector general reviewed 88 employees' files and found that 38 percent "had no individual recommendation and justification for the performance award."

"The legitimacy of such large awards is called into question by the lack of an appropriate selection process and the reliance on boilerplate justifications that could be applicable to anyone," the report said.

The report also noted that fewer than 3 percent of nonexecutive employees received bonuses in 2003.

In its response, the TSA said that executives who got a bonus didn't get a pay increase and weren't eligible for a presidential awards program that can amount to as much as 35 percent of their base pay. The agency agreed, however, that more could be done to equalize treatment of top executives and lower-level employees.